Alitheia Capital and Goodwell Investments have announced their successful exit from Baobab Nigeria, marking the first divestment from their joint uMunthu Fund. Baobab Nigeria, a financial institution dedicated to providing inclusive banking services for individuals and MSMEs in underserved regions of sub-Saharan Africa, has experienced remarkable growth over the past 12 years.
A Transformative Partnership
The exit follows a fruitful partnership that began with an initial investment in Baobab Nigeria, formerly known as MicroCred, in 2012. In 2015, the uMunthu Fund continued its support, driving the bank’s transformation and expansion. What started as a small operation in Kaduna state has now grown to serve 230,000 customers across 16 Nigerian states, operating 38 branches—an impressive leap from the original five branches and 19,000 customers.
Expanding Financial Inclusion
Despite rapid expansion, Baobab Nigeria has remained committed to financial inclusion, ensuring small loan and deposit sizes to accommodate its diverse customer base. The uMunthu Fund played a crucial role in strengthening governance, professionalizing operations, and guiding the institution’s evolution from a microfinance entity to one of Nigeria’s leading national microfinance banks.
Alitheia and Goodwell were trailblazers in this investment, becoming the first local investors on Baobab’s board and introducing private capital into northern Nigeria, a region previously dominated by Development Finance Institutions (DFIs). Their strategic involvement extended beyond capital injection, offering financial structuring expertise, governance enhancements, and access to valuable business networks.
Measurable Impact and Future Outlook
Baobab Nigeria has played a pivotal role in bridging Nigeria’s financial inclusion gap, particularly in the northern region, where up to 70% of the population initially lacked access to banking services. By 2023, government data indicated that the financially excluded population had dropped to 26%, highlighting significant progress. The bank’s impact is evident in its exponential growth—serving 12 times more customers, expanding its branch network by 7.6 times, and tripling its workforce while keeping loan sizes accessible to small businesses and individuals.
The financial success of the uMunthu investment is also clear, with the fund’s value tripling in Naira terms, reinforcing the power of patient capital in emerging markets. With Baobab Nigeria now transitioning to full ownership under the international Baobab Group, the institution is set to continue its mission of supporting underserved communities and driving economic empowerment across Nigeria.
“We take immense pride in Baobab’s journey from a modest office in northern Nigeria to one of the top three nationally licensed microfinance banks in the country,” said Tokunboh Ishmael, Managing Partner at Alitheia Capital. “This success story is a testament to strong leadership, sound governance, and sustainable financial impact.”
Looking Ahead
Alitheia and Goodwell remain committed to their hands-on investment approach with the uMunthu portfolio and anticipate further successful exits in 2025. Their uMunthu II Fund is now in its final fundraising phase, welcoming investors eager to support the next wave of high-impact financial inclusion initiatives inspired by Baobab Nigeria’s success.
